Analysis finds that Indiana’s housing affordability gap is growing (2024)

It would take 33% of the average person’s wage to begin homeownership — resulting in the highest debt to income ratio since 2007. Housing is effectively the least affordable it's been in nearly two decades. (Getty Images)

The housing affordability gap for Indiana’s minimum wage workers grew according to the latest “Out of Reach” report, finding that those Hoosiers would need to work 122 hours per week to afford a Fair Market Rate two-bedroom apartment.

“The new Out of Reach 2024 report finds that Indiana’s 2024 Housing Wage of $22.07 needed to afford a two-bedroom rental unit is an increase of $3.07 per hour above the 2023 Housing Wage. However, the average Hoosier renter’s wage of $17.92 per hour in 2024 increased by only $0.06 over the past year,” said Aspen Clemons, executive director at Prosperity Indiana. “To address Indiana’s growing housing affordability crisis, state and local policymakers must bridge the growing gap between rents and incomes by using all available policy tools.”

In order to afford that unit, valued at the Fair Market Rate of $1,148, a full-time Hoosier working only 40 hours a week would need a “Housing Wage” of $22.07 — far above the state’s minimum wage of $7.25 and above the average renter’s wage. The findings, from an annual report jointly published by the National Low Income Housing Coalition and Prosperity Indiana, included data on all 50 states and concluded that Indiana had dropped from 43 to 34 in terms of affordability between 2021 and 2024.

Indiana still falls below the national Housing Wage, which is $32.11 per hour for a two-bedroom apartment.

The Housing Wage is calculated by keeping the cost of a Fair Market Rate two-bedroom apartment and utilities at 30% of a household’s income — meaning that a Hoosier household needs to earn $3,826 monthly or $45,913 annually.

Findings from the report

Prospects are slightly better for renters seeking a one-bedroom apartment, which would cost someone $949 monthly. That would require 101 hours of minimum wage work weekly. But renters living in more populated areas have even higher costs — including the Indianapolis-Carmel area and Louisville area, which have a housing wage of $25.94 and $25.02, respectively.

The average Hoosier wage falls short in 88 of 92 counties and in 25 of the state’s 26 metro areas, according to the report. Additionally, many of Indiana’s core job sectors don’t pay wages high enough to cover the Fair Market Rate for a two-bedroom apartment.

“For the first time in recent history, less than a third of Indiana’s Top 20 largest occupations pay wages sufficient to meet the state’s Housing Wage,” said Andrew Bradley, the senior director of Policy and Strategy at Prosperity Indiana. “Only a quarter of Hoosiers working in the state’s most popular occupations earn enough on average to afford rent. This is not helping Hoosiers get ahead. With the cost of housing increasingly out of reach for Indiana families, we need coordinated efforts by our federal, state, and local policymakers to raise wages and increase the supply of safe, stable, and affordable housing for all Hoosiers.”

Just six of Indiana’s 20 most common occupations paid a full-time wage enough to afford a two-bedroom rental unit, down from 10 occupations in 2023. These poorly paid occupations employ 843,720 Hoosiers, more than a fifth of the state’s workforce, and are frequently held by women or Hoosiers of color.

Such jobs included home health and personal care aides, with a median hourly wage of $14.79 — almost $8 less than the full-time housing wage of $22.07.

Ties to homelessness

“With the cost of rent growing further out of reach for those with the lowest incomes, and absent an adequate housing safety net, it is no surprise that homelessness has been on the rise,” the report concluded.

The national January 2023 Point-In-Time count, a method of counting the number of people experiencing homelessness, identified roughly 653,000 people — the highest number ever recorded and a 12% from 2022.

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In Indiana, the count found 4,398 Hoosiers experiencing homelessness outside of Marion County, which conducts a separate count. Notably, the U.S. Supreme Court last week ruled that local law enforcement agencies could arrest homeless people for sleeping outdoors even if their city doesn’t have adequate housing resources.

A potential solution could be federal intervention and the report explicitly names bills authored by Indiana Sen. Todd Young to expand housing choice vouchers. Young has identified housing affordability as one of his priorities, authoring bills to incentivize investments in distressed neighborhoods nationwide and cutting “burdensome” local regulations.

In particular, advocates highlighted the “Family Stability and Opportunity Vouchers Act” introduced last year to create 250,000 new housing vouchers for low-income families with young children. Another, the “Eviction Crisis Act,” would build upon Indiana’s Emergency Rental Assistance program to create a “permanent stabilization fund for renters facing temporary financial setbacks,” according to the release.

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